Rep. Blunt: Bailout Plan Tweaks Will Help Passage
MELISSA BLOCK, host:
So what about the House, which has proved far more resistant to this legislation? When the House rejected an earlier version of the rescue bill on Monday, two-thirds of Republicans voted against it. And it will be up to the House Minority Whip Roy Blunt to try to bring those rejectionist Republicans in line. Congressman Blunt, welcome back to the program.
Representative ROY BLUNT (Republican, Missouri): Well, Melissa, it's nice to be with you. Again, though, I wish it was a conversation we are having in a few days, where this is all now the law of the land and how did we get done. We're trying to do that. About three things have happened since Monday that I think are helpful.
One is many of the constituents in the congressional districts around the country are seeing for the first time the potential impact on them, both in some restriction in credit at the bank, but more importantly, their pension funds, their 401Ks. Two, we've seen the SEC come up with a significant, (unintelligible) different accounting rule that our members were very concerned about in terms of valuing these assets. And three, the addition of both the tax package that stimulates the economy by continuing good tax policy and the FDIC insurance limit raised are helpful to our members.
And hopefully, we had enough people that wanted some or all of those things to happen that this allows them to look at the new facts, be able to explain how important it was that they have fought to get these things included, and have a few more yes votes later this week.
BLOCK: A few more yes votes, but Congressman, the backbone, the essential backbone of this bill is still the same, $700 billion for the Treasury to buy bad debt. Do you expect to be running into, again, a Republican buzzsaw on that?
Representative BLUNT: Well, actually, you know, actually, I think that's the problem here, Melissa, and the whole explanation. The Treasury is not buying bad debt at some bad number. The Treasury is buying assets that aren't near the 100 percent value, hopefully, at whatever the floor is. You know, you always make money if you buy right. The guy that buys the junk car by the side of the road that knows what he's doing can double his money. If I buy the junk car by the side of the road, I've got to pay somebody else within a hundred bucks to haul the junk car off.
This is a salvage operation. Nobody's ever been suggesting that the government would buy these assets at anything more than they were worth, and that the unfortunate terms that got attached to this led taxpayers to believe that their money was going to be lost when I think there's almost no chance and, in fact, under the laws now written, there is no chance that their money would be lost over the short term.
These are investments. These are not gifts to anybody. The people selling these assets are going to sell them for some substantial amount of money less than they gave for them, and the government has a substantial chance to eventually get back all the money that, certainly, all the money that the government gave, but maybe all the money that they would have even at their face value because the government has time, patience, and can unravel these assets.
BLOCK: Congressman Blunt, when you and I spoke on this program on Friday, you were heading into negotiations over the weekend that you were optimistic would bear fruit, would reach an agreement, and you did. And then there was the surprise rejection in the House. Was there a real failure here, do you think, of Republican leadership both from the White House and from Congress?
Representative BLUNT: Well, I certainly think we could and we should have done - been able to do a better job of - I think part of this was establishing an absolute deadline on when you had to have that vote. I've been in the House leadership for a long time, and that's never happened before. It's not really the fault of the majority, either.
It's just that we're up against a deadline involving a religious holiday where everybody knew you were going to vote by a certain time. We would have been a much off if we would have just said, OK, we're going to go to the floor sometime on Monday or Tuesday, when we have the votes. And that's what we need to be doing over the next few days, working to get the votes, setting no needless deadline for ourselves, and go on to the floor when we're successful, instead of telling everybody who'd be much more comfortable voting no that if you can just wait us out a little bit longer, you're going to get that chance to vote no and run to the airport.
We shouldn't let that happen this time. This is too important to the financial future of the country, too important to Main Street, and taxpayers are not bailing anybody out. Taxpayers are going in and at the true bargain basement floor of the value of an asset, buying it, and then, at some point in the future, in all likelihood making money, and they're almost certainly not losing money.
BLOCK: OK, Congressman Blunt, thanks very much.
Representative BLUNT: Good to talk to you, Melissa.
BLOCK: That's Republican Roy Blunt of Missouri, the House Minority Whip.
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